Manufacturers are overwhelmingly focused on the need to create jobs and grow the U.S. economy. It is incumbent upon policymakers in Washington to stay focused on this critical mission and ensure policies emanating from inside the Beltway are consistent with this goal.
In the case of the reauthorization of the Export-Import (Ex-Im) Bank, however, thousands of businesses of all sizes in congressional districts across the nation can’t understand why Washington is threatening to let Ex-Im’s charter expire. Frankly, I don’t either.
The critics would have you believe the Ex-Im Bank is a smoke-filled room in Washington where insiders get access to special deals that boost their exports. Unfortunately, the people perpetuating that image do not understand the realities of today’s global economy. In trying to compete and win overseas, U.S. exporters of all sizes face fierce competition from foreign companies, whose own home countries go to extreme lengths to provide financing options for buyers.
In fact, 865 businesses and associations attested to the importance of the Ex-Im Bank in a letter to Congress this week. Last year, the Ex-Im Bank supported $37 billion in exports that, in turn, sustained more than 200,000 American jobs at 3,400 companies.
It’s nonsensical that manufacturers in America—who already must compete on quality, price and delivery—would lose out to foreign competitors simply because other countries are willing to offer better financing terms. But that’s what will happen if opponents have their way and shutter the Ex-Im Bank come September 30.
While opponents might have you believe otherwise, the Ex-Im Bank isn’t simply extending financing haphazardly to any company that wants it. It is used in a limited and targeted manner. In 2012, the 2 percent of all U.S. exporters that used export financing tools available through the Ex-Im Bank did so in cases such as:
- When a small- or medium-sized enterprise is seeking a working capital loan guarantee or export credit insurance to facilitate a loan from its commercial bank.
- In sales to regions where private finance won’t lend because markets are not developed or regulation blocks them.
- If firms face competition from others with foreign export credit assistance.
While limited in its scope and application, the benefits of reliable access to export financing through the Ex-Im Bank is vital to the ability of U.S. firms to compete. In fact, I have heard from manufacturers from all around the nation who say that without the ability to bring Ex-Im financing options to the table, they’ll have no shot at competing against their foreign competitors that do.
What’s more, by supporting the jobs and competitiveness of U.S. exporting companies, thousands more suppliers are affected by the work orders and new business provided through sales to overseas markets. After all, 95 percent of the world’s consumers are outside the United States.
America’s manufacturers can’t afford to forfeit a critical tool that supports their competitiveness in some of the most difficult markets around the world. All told, allowing the Ex-Im Bank to shut its doors would be a gift to foreign producers overseas and would result in the loss of exports, manufacturing and jobs here in the United States. That’s not the kind of policy any member of Congress would want his or her name on. Manufacturers urge Congress to act quickly in reauthorizing the Ex-Im Bank’s charter before U.S. companies are disadvantaged and American jobs are lost.
Jay Timmons is President and CEO of the National Association of Manufacturers.